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B..D.J.12. 
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MR WEBSTER'S SPEECH OH MR EWING-'S RESOLUTION 
TO RESCIND THE TREASURY ORDER OF JULY 11,1836 



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MR. WEBSTER'S SPEECH 



MR. EWING'S RESOLUTION 



RESCIND THE TREASURY ORDER 



OF JULY 11, 1836, 



DELIVERED 



IN THE SENATE OF THE UNITED STATES, 



December 21, 1836. 



WASHINGTON: 

PRINTED BY GALES AND SKA TON 

1837. 



VA 



SPEECH. 



The Senate having again proceeded to the order of 
the day, which was the consideration of the following 
resolutions, heretofore moved by Mr. Ewing, of Ohio: 

Resolved by the Senate and House of Representatives , Spc. That 
the Treasury order of the eleventh day of July, Anno Domini one 
thousand eight hundred and thirty-six, designating the funds which 
should be receivable in payment for public lands, be, and the same is 
hereby, rescinded. 

Resolved, also, That it shall not be lawful for the Secretary of the 
Treasury to delegate to any person, or to any corporation, the power 
of directing what funds shall be receivable for customs, or for the pub- 
lic lands; nor shall he make any discrimination in the funds so receiva- 
ble, between different individuals, or between the different branches of 
the public revenue. 

Mr. Webster addressed the Senate as follows: 
Mr. President : The power of disposing of this im- 
portant subject is in the hands of gentlemen, both here 
and elsewhere, who are not likely to be influenced by 
any opinions of mine. I have no motive, therefore, for 
addressing the Senate, but to discharge a public duty, 
and to fulfil the expectations of those who look to me 
for opposition, whether availing or unavailing, to what- 
ever I believe to be illegal or injurious to the public in- 
terests. In both these respects, the Treasury order of 
the 11th of July appears to me objectionable. I think 
it not warranted by law, and I think it also practically 
prejudicial. I think it has contributed not a little to the 
pecuniary difficulties under which the whole country 
has been, and still is, laboring ; and that its direct effect 



on one particular part of the country is still more de- 
cidedly and severely unfavorable. 

The Treasury order, or Treasury circular, of the 
11th of July last, is addressed by the Secretary to the 
receivers of public money, and to the deposite banks. 
It instructs these receivers and these banks, after the 
15th day of August then next, to receive in payment of 
the public lands nothing except what is directed by exist- 
ing laics, viz : gold and silver, and, in the proper cases, 
Virginia land scrip; provided that, till the 15th of De- 
cember then next, the same indulgence heretofore ex- 
tended, as to the kind of money received, may be con- 
tinued, for any quantity of land not exceeding 320 acres, 
to each purchaser who is an actual settler or bona fide 
resident in the State where the sales are made. 

The exception in favor of Virginia scrip is founded 
on a particular act of Congress, and makes no part of 
the general question. It is not necessary, therefore, to 
refer farther to that exception. The substance of the 
general instruction is, that nothing but gold and silver 
shall be received in payment for public lands; provided, 
however, that actual settlers and bona fide residents in 
the States where the sales are made, may purchase in 
quantities not exceeding 320 acres each, and be allowed 
to pay as heretofore. But this provision was limited to 
the 15th day of December, which has now passed; so 
that, by virtue of this order, gold and silver are now 
required of all purchasers and for all quantities. 

I am very glad that a resolution to rescind this order 
has been thus early introduced ; and I am glad, too, 
since the resolution is to be opposed, that opposition 
comes early, in a bold, unequivocal, and decided form. 
The order, it seems, is to be defended as being both 
legal and useful. Let its defence, then, be made. 

The honorable member from Missouri (Mr. Benton) 



objects even to giving the resolution to rescind a second 
reading. He avails himself of his right, though it be 
not according to general practice, to arrest the progress 
of the measure at its first stage. This, at least, is 
open, bold, and manly warfare. 

The honorable member, in his elaborate speech, 
founds his opposition to this resolution, and his support 
of the Treasury order, on those general principles re- 
specting currency, which he is known to entertain, and 
which he has maintained for many years. His opinions 
some of us regard as altogether ultra and impractica- 
ble ; looking to a state of things not desirable in itself, 
even if it were practicable; and, if it were desirable, as 
being far beyond the power of this Government to bring 
about. 

The honorable member has manifested much perse- 
verance and abundant labor, most undoubtedly, in sup- 
port of his opinions ; he is understood, also, to have 
had countenance from high places; and what new hopes 
of success the present moment holds out to him, I am 
not able to judge, but we shall probably soon see. It 
is precisely on these general and long-known opinions 
that he rests his support of the Treasury order. A 
question, therefore, is at once raised between the gen- 
tleman's principles and opinions on the subject of the 
currency, and the principles and opinions which have 
generally prevailed in the country, and which are, and 
have been, entirely opposite to his. That question is 
now about to be put to the vote of the Senate. In the 
progress, and by the termination of this discussion, we 
shall learn whether the gentleman's sentiments are, or 
are not to prevail, so far, at least, as the Senate is con- 
cerned. The country will rejoice, I am sure, to see 
some declaration of the opinions of Congress on a sub- 
ject about which so much has been said, and which is so 



6 

well calculated, by its perpetual agitation, to disquiet 
and disturb the confidence of society. 

We are now fast approaching the day when one ad- 
ministration goes out of office, and another is to come 
in. The country has an interest in learning, as soon as 
possible, whether the new administration, while it re- 
ceives the power and patronage, is to inherit, also, the 
topics, and the projects, of the past; whether it is to 
keep up the avowal of the same objects and the same 
schemes, especially in regard to the currency. The or- 
der of the Secretary is prospective, and, on the face of 
it, perpetual. Nothing in or about it gives it the least 
appearance of a temporary measure. On the contrary, 
its terms imply no limitation in point of duration, and 
the gradual manner in which it is to come into operation 
shows plainly an intention of making it the settled and 
permanent policy of Government. Indeed, it is but now 
beginning its complete existence. It is only five or six 
days since its full operation has commenced. Is it to 
stand as the law of the land and the rule of the Treas- 
ury, under the administration which is to ensue 1 And 
are those notions of an exclusive specie currency, and 
opposition to all banks, on which it is defended, to be 
espoused and maintained by the new administration, as 
they have been by its predecessor 1 These are ques- 
tions, not of mere curiosity, but of the highest interest 
to the whole country. 

In considering this order, the first thing naturally is, 
to look for the causes which led to it, or are assigned 
for its promulgation. And these, on the face of the 
order itself, are declared to be "complaints which have 
been made of frauds, speculations, and monopolies, in 
the purchase of the public lands, and the aid which is 
said to be given to effect these objects by excessive 
bank credits, and dangerous, if not partial facilities 



through bank drafts and bank deposites, and the gen- 
eral evil influence likely to result to the public interest, 
and especially the safety of the great amount of money 
in the Treasury, and the sound condition of the cur- 
rency of the country, from the further exchange of the 
national domain in this manner, and chiefly for bank 
credits and paper money." 

This is the catalogue of evils to be cured by this or- 
der. In what these frauds consist, what are the mo- 
nopolies complained of, or what is precisely intended 
by these injurious speculations, we are not informed. 
All is left on the general surmise of fraud, speculation, 
and monopoly. It is not avowed or intimated that the 
Government has sustained any loss, either by the receipt 
of bank notes which proved not to be equivalent to spe- 
cie, or in any other way. And it is not a little remarka- 
ble that these evils of fraud, speculation, and monopoly, 
should have become so enormous and so notorious, on 
the 11th of July, as to require this Executive interfe- 
rence for their supression, and yet that they should not 
have reached such a height as to make it proper to lay 
the subject before Congress, although Congress re- 
mained in session until within seven days of the date 
of the order. And what makes this circumstance still 
more remarkable, is the fact that, in his annual message 
at the commencement of the same session, the Presi- 
dent had spoken of the rapid sales of the public lands 
as one of the most gratifying proofs of the general 
prosperity of the country, without suggesting that any 
danger whatever was to be apprehended from fraud, 
speculation, or monopoly. His words were: "Among 
the evidences of the increasing prosperity of the coun- 
try, not the least gratifying is that afforded by the re- 
ceipts from the sales of the public lands, which amount, 
in the present year, to the unexpected sum of eleven 



8 

millions." From the time of the delivery of that mes- 
sage down to the date of the Treasury order, there had 
not been the least change, so far as I know, or so far as 
we are informed, in the manner of receiving payment 
for the public lands. Every thing stood, on the 1 1th of 
July, 1836, as it had stood at the opening of the ses- 
sion, in December, 1 835. How so different a view of 
things happened to be taken at the two periods, we 
may be able to learn, perhaps, in the further progress 
of this debate. 

The order speaks of the "evil influence" likely to 
result from the further exchange of the public lands 
into " paper money." Now, this is the very language 
of the gentleman from Missouri. He habitually speaks 
of the notes of all banks, however solvent, and however 
promptly their notes may be redeemed in gold and sil- 
ver, as "paper money." The Secretary has adopted 
the honorable member's phrases, and he speaks, too, of 
all the bank notes received at the land offices, although 
every one of them is redeemable in specie, on demand, 
but as so much " paper money." 

In this respect, also, sir, I hope we may know more as 
we grow older, and be able to learn whether, in times 
to come, as in times recently passed, the justly obnox- 
ious and odious character of " paper money" is to be 
applied to the issues of all the banks in all the States, 
with whatever punctuality they redeem their bills. This 
is quite new, as financial language. By paper money, in 
its obnoxious sense, I understand paper, issued on credit 
alone, without capital, without funds assigned for its pay- 
ment, resting only on the good faith and the future abil- 
ity of those who issue it. Such was the paper money of 
our revolutionary times ; and such, perhaps, may have 
been the true character of the paper of particular institu- 
tions since. But the notes of banks of competent capi- 



tals, limited in amount to a due proportion to such capi- 
tals, made payable on demand in gold and silver, and 
always so paid on demand, are paper money in no sense 
but one ; that is to say, they are made of paper, and they 
circulate as money. And it may be proper enough for 
those who maintain that nothing should so circulate but 
gold and silver, to denominate such bank notes " paper 
money," since they regard them but as paper intruders 
into channels which should flow only with gold and silver. 
If this language of the order is authentic, and is to be so 
hereafter, and all bank notes are to be regarded and stig- 
matized as mere " paper money," the sooner the country 
knows it the better. 

The member from Missouri charges those who wish to 
rescind the Treasury order with two objects : first, to de- 
grade and disgrace the President, and, next, to overthrow 
the constitutional currency of the country. 

For my own part, sir, I denounce nobody ; I seek to 
degrade or disgrace nobody. Holding the order illegal 
and unwise, I shall certainly vote to rescind it ; and, in 
the discharge of this duty, I hope I am not expected to 
shrink back, lest I should do something which might call 
in question the wisdom of the Secretary, or even of the 
President. And I hope that so much of independence 
as may be manifested by free discussion and an honest 
vote is not to cause denunciation from any quarter. If 
it should, let it come. 

As to an attempt to overthrow the constitutional cur- 
rency of the country, if I were now to enter into such a 
design, I should be beginning, at rather a late day, to 
wage war against the efforts of my whole political life. 
From my very first concern with public affairs, I have 
looked at the public currency as a matter of the highest 
interest, and hope I have given sufficient proofs of a dis- 
position at all times to maintain it sound and secure, 



10 

against all attacks and all dangers. When I first enter- 
ed the other House of Congress, the currency was ex- 
ceedingly deranged. Most of the banks had stopped 
payment, and the circulating medium had then become, 
indeed, paper money. So soon as a state of peace en- 
abled us, I took some part in an effort, with others, to 
restore the currency to a better state ; and success fol- 
lowed that effort. 

But what is meant by the " constitutional currency," 
about which so much is said ? What species, or forms of 
currency, does the constitution allow, and what does it 
forbid ? It is plain enough that this depends on what we 
understand by currency. Currency, in a large, and per- 
haps, in a just sense, includes not only gold and silver 
and bank notes, but bills of exchange also. It may in- 
clude all that adjusts exchanges, and settles balances, in 
the operations of trade and business. But if we under- 
stand by currency the legal money of the country, that 
which constitutes a lawful tender for debts, and is the 
statute measure of value, then, undoubtedly, nothing is in- 
cluded but gold and silver. Most unquestionably there 
is no legal tender, and there can be no legal tender, in 
this country, under the authority of this Government or 
any other, but gold and silver, either the coinage of our 
own mints, or foreign coins, at rates regulated by Con- 
gress. This is a constitutional principle, perfectly plain, 
and of the very highest importance. The States are ex- 
pressly prohibited from making any thing but gold and 
silver a tender in payment of debts ; and, although no 
such express prohibition is applied to Congress, yet, as 
Congress has no power granted to it, in this respect, but 
to coin money, and to regulate the value of foreign coins, 
it clearly has no power to substitute paper, or any thing 
else, for coin, as a tender in payment of debts, and in 
discharge of contracts. Congress has exercised this 



11 

power, fully, in both its branches. It has coined money , 
and still coins it ; it has regulated the value of foreign 
coins, and still regulates their value. The legal tender, 
therefore, the constitutional standard of value, is estab- 
lished, and cannot be overthrown. To overthrow it, 
would shake the whole system. 

But if the constitution knows only gold and silver as 
a legal tender, does it follow that the constitution cannot 
tolerate the voluntary circulation of bank notes, converti- 
ble into gold and silver at the will of the holder, as part 
of the actual money of the country 1 Is a man not only 
to be entitled to demand gold and silver for every debt, 
but is he, or should he be, obliged to demand it in all 
cases 1 Is it, or should Government make it, unlaw- 
ful to receive pay in any thing else ? Such a notion is 
too absurd to be seriously treated. The constitutional 
tender is the thing to be preserved, and it ought to be 
preserved sacredly, under all circumstances. The rest 
remains for judicious legislation by those who have com- 
petent authority. i 

I have already said that Congress has never supposed 
itself authorized to make any thing but coin a tender, in 
the payment of debts, between individual and individual ; 
but it by no means follows from this, that it may not 
authorize the receipt of any thing but coin in payment 
of debts due to the United States. 

These powers are distinct, and flow from different 
sources. The power of coinage is a general power ; a 
portion of sovereignty, taken from the States and con 
ferred on Congress, for the sake both of uniformity and 
greater security. It is to be exercised for the benefit 
of all the people, by establishing a legal tender and stand- 
ard of value in all transactions. 

But when Congress lays duties and taxes, or disposes 
of the public lands, it may direct payment to be made in 



12 

whatever medium it pleases. The authority to lay taxes 
includes the power of deciding how they shall be paid ; 
and the power granted by the constitution to dispose of 
the territory belonging to the United States carries with 
it, of course, the power of fixing not only the price, and 
the conditions, and time of payment, but also the medium 
of payment. Both in respect to duties and taxes, and 
payments for lands, it has been, accordingly, the constant 
practice of Congress, in its discretion, to provide for the 
receipt of sundry things, besides gold and silver. As 
early as 1797, the public stocks of the Government were 
made receivable for lands sold ; the six per cents, at par, 
and other descriptions of stock in proportion. This 
policy had, probably, a double purpose in view — the one 
to sustain the price of the public stocks, and the other to 
hasten the sale and settlement of the lands. Other stat- 
utes have given the like receivable character to Missis- 
sippi stock, and to Virginia land scrip. So Treasury notes 
were made receivable for duties and taxes ; and, indeed, 
if any such should now be found outstanding, I believe 
they constitute a lawful mode of payment, at the present 
moment, whether for duties and taxes, or for lands. 

But, in regard both to taxes and payments for lands, 
Congress has not left the subject without complete legal 
regulation. It has exercised its full power. The statutes 
have declared what should be received, from debtors and 
from purchasers, and have left no ground whatever for the 
interference of Executive discretion, or Executive con- 
trol. So far as I know, there has been no period when 
this subject was not subject to express legal provision. 
When the duty act and the tonnage act were passed, at 
the first session of the first Congress, an act was passed 
also, at the same session, containing a section which 
prescribed the coins, and fixed their values, in which 
those duties were to be paid. From that time to this, 



13 

the medium for the payment of public debts and dues 
has been a matter of fixed legal right, and not a matter 
of Executive discretion at all. The Secretary of the 
Treasury has had no more power over these laws than 
over other laws. He can no more change the legal 
mode of paying the duty than he can change the amount 
of the duty to be paid ; or alter the legal means of pay- 
ing for lands, with any more propriety than he can alter 
the price of the lands themselves. It would be strange, 
indeed, if this were not so. It would be ridiculous to 
say that we lived under a Government of laws, if an 
Executive officer may say in what currency, or medium, a 
man shall pay his taxes and debts to Government, and may 
make one rule for one man, and another rule for another. 
We might as w r ell admit that the Secretary had authority 
to remit or give in the debt of one, while he enforced 
payment on the other. 

I desire, sir, even at the expense of some repetition, to 
fix the attention of the Senate to this proposition, that 
Congress, having by the constitution authority to dispose 
of the public territory, has passed laws for the complete 
exercise of that power ; laws which not only have fixed 
the price of the public lands, the manner of sales, and 
the time of payment, but which have fixed also, with 
equal precision, the medium, or kinds of money, or of 
other things, which shall be received in payment. It has 
neglected no part of this important trust ; it has delega- 
ted no part of it ; it has left no ground, not an inch, for 
Executive interposition. 

The only question, therefore, is, what is the law, or 
what was the law, when the Secretary issued his order? 

The Secretary considers that that which has been uni- 
formly done for twenty years, that is to say, the receiving 
of payment for the public lands in the bills of specie- 
paying banks, is against law. He calls it an " indul- 



14 

gence," and this " indulgence" the order proposes to 
continue for a limited time, and in favor of a particular 
class of purchasers. If this were an indulgence, and 
against law, one might well ask, how has it happened 
that it should have continued so long, especially through 
recent years, marked by such a spirit of thorough and 
searching reform I It might be asked, too, if this be 
illegal, and an indulgence only, why continue it longer, 
and especially why continue it as to some, and refuse to 
continue it as to others I 

But, sir, it is time to turn to the statute, and to see 
what the legal provision is. On the 30th of April, 1816, 
a resolution passed both Houses of Congress. It was in 
the common form of a joint resolution, and was approved 
by the President ; and no one doubts, I suppose, that, for 
the purpose intended by it, it was as authentic and valid 
as a law in any other form. It provides that, " from and 
after the 20th day of February next, [1817,] no duties, 
taxes, debts, or sums of money, accruing or becoming 
payable to the United States, ought to be collected or 
received otherwise than in the legal currency of the Uni- 
ted States, or Treasury notes, or notes of the Bank of 
the United States, or in notes of banks which are paya- 
ble in specie on demand, in the said legal currency of the 
United States." 

This joint resolution authoritatively fixed the rights of 
parties paying, and the duties of officers receiving. So 
far as respects the notes of the Bank of the United 
States, it was altered by a law of the last session ; but, 
in all other particulars, it is, as I suppose, in full force at 
the present moment ; and as it expressly authorizes the 
receipt of such bank notes as are payable and paid on 
demand, I cannot understand how the receipt of such 
notes is a matter of " indulgence." We may as well say 
that to be allowed to pay in Treasury notes, or in foreign 



15 

coins, or, indeed, in our own gold and silver, is an indul- 
gence, since the act places all on the same ground. 

The honorable member from Missouri has, indeed, 
himself furnished a complete answer to the Secretary's 
idea ; that is to say, he defends the order on grounds not 
only differing from, but totally inconsistent with, those 
assumed by the Secretary. He does not consider the 
receipt of bank notes hitherto, or up to the time of issu- 
ing the order, as an indulgence, but as a law r ful right 
while it lasted. How he proves this right to be now 
terminated, and terminated by force of the order, I shall 
consider presently. I only say now, that his argument 
entirely deprives the Secretary of the only ground assign- 
ed by him for the Treasury order. 

The Secretary directs the receivers "to receive in 
payment of the public lands nothing except what is 
directed by the existing laws, viz: gold and silver, and, in 
the proper cases, Virginia land scrip." Gold and silver, 
then, and, in the proper cases, Virginia land scrip, are, 
in the opinion of the Secretary, all that is directed to be 
received by the existing laws. The receipt of bank 
notes he considers, therefore, but an indulgence, a thing 
against law, to be tolerated a little longer, as to some 
cases, and then to be finally suppressed. 

Apparently not at all satisfied with this view of the 
Secretary? of the ground upon which his own order must 
stand, the member from Missouri not only abandons it 
altogether, but sets up another, wholly inconsistent with 
it. He admits the legality of payment in such bank 
notes up to the date of the order itself, but insists that 
the Secretary of the Treasury had a right of selection, 
and a right of rejection also; and that, although the 
various modes of payment provided by the resolution of 
1816 were all good and lawful, till the Secretary should 
make some of them otherwise, yet that, by virtue of his 



16 

power of selection or rejection, he might at any time 
strike one or more of them out of the list. And this 
power of selection or rejection he thinks he finds in the 
resolution of 1816 itself. 

I incline to think, sir, that the Secretary will be as 
little satisfied with the footing on which his friend, the 
honorable member from Missouri, thus places his order, 
as that friend is with the Secretary's own ground. For 
my part, I think them both just half right ; that is to 
say, both, in my humble judgment, are just so far right 
as they distrust and disclaim the reasoning of each other. 
Let me state, sir, as I understand it, the honorable mem- 
ber's argument. It is, that the law of 1816 gives the 
Secretary a selection ; that it provides four different 
modes, or media, of payment ; that the Secretary is to 
collect the revenue in one, or several, or all these four 
modes, or media, at his discretion ; that all are in the dis- 
junctive, as I think he expressed it ; and that the resolu- 
tion, or law, is not mandatory or conclusive in favor of 
any one. According to the honorable member, therefore, 
if the Secretary had chosen to say that our own eagles 
and our own dollars should no longer be receivable, 
whether for customs, taxes, or public lands, he had a 
clear right to say so, and to stop their reception. 

Before a construction of so extraordinary a character 
be fixed on the law of 1816, something like the appear- 
ance of argument, I think, might be expected in its favor. 
But what is there upon which to found such an implied 
power in the Secretary of the Treasury \ Is there a 
syllable in the whole law which countenances any sucli 
idea for a single moment 1 There clearly is not. The 
law was intended to provide, and does provide, in what 
sorts of money or other means of payment those who 
owe debts to the Government shall pay those debts. 

It enumerates four kinds of money or other means of 



17 

payment ; and can any thing be plainer than that he who 
has to pay may have his choice out of all four 1 All be- 
ing equally lawful, the choice is with the payer, and not 
with the receiver. This would seem to be too plain 
either to be argued or to be denied. Other laws of the 
United States have made both gold and silver coins a 
tender in the payment of private debts. Did any man 
ever imagine that in that case the choice between the 
coins to be tendered was to lie with the party receiving 1 
No one could ever be guilty of such an absurdity. And 
unless there 'be something in the law of 1816 itself, 
which either expressly, or by reasonable inference, con- 
fers a similar power orf the Secretary of the Treasury 
in regard to public payments, is there, in the nature 
of things, any difFeftn6e between the cases'! Now, 
there is nothing, either in the law of 1816, or any other 
law, which confers any such power on the Secretary of 
the Treasury, either directly or indirectly, or which sug- 
gests, or intimates, any ground upon winch such power 
might ba implied. Indeed, the statement of the argu- 
ment seems to me enough to confute if. It makes the 
law of 1816 not a mile, but the dissolution of all rule ; 
not a law, but the abrogation of all existing laws. Ac- 
cording to the argument, the Secretary of the Treasury 
had authority, not only to refuse the receipt of Treasury 
notes, which had been issued upon the faith of statutes 
expressly making them receivable for # debts and duties, 
and, notes of the Bank of the United States, which were 
also made receivable by the law creating the bank, but 
to refuse also foreign coins, and the coinage of our own 
mint? putting thus the legislation of Congress for five- 
and-twenty years at the unrestrained and absolute dis- 
cretion of the Secretaiy of the Treasury. It appears to 
* me quite impossible that any gentleman, on reflection, 
can undertake to support such a construction. 
.2 



18 

Bat the gentleman relies on a supposed practice, to 
maintain his interpretation of the law. What practice I 
Has any Secretary ever refused to receive the notes of 
specie-paying banks, either at the custom-house or the 
land offices, for a single hour X Never. Has any Secre- 
tary presumed to strike foreign coin, or Treasury notes, 
or our own coin, out of the list of receivables ? Such an 
idea certainly never entered into the head of any Secre- 
tary. The gentleman argues that the Treasury has 
made discriminations ; but what discriminations ? I 
suppose the whole truth to be simply this : that, admit- 
ting at all times the right of the party paying to pay in 
notes of specie-paying banks, the collectors and re- 
ceivers have not been held bound to receive notes of 
distant banks of which they knew nothing, and could not 
judge, therefore, whether their notes came within the 
law. Those collectors and receivers were bound to 
receive the bills of specie-paying banks ; but, as that 
duty arose from the fact that the notes tendered were 
the notes of specie-paying banks, that fact, if not noto- 
rious or already known to them, must be made known, 
with reasonable certainty, before the duty to receive 
them became imperative. I suppose there may have 
been Treasury orders, regulating the conduct of collect- 
ors and receivers in this particular. Any orders which 
went further than this would go beyond the law. 

The honorable member quotes one of the by-laws of 
the late Bank of the United States ; but what has that to 
do with the subject? Does the honorable member think 
that the by-laws of the late bank were laws to the peo- 
ple of the United States] The bank was under no 
obligation to receive any notes on deposite except its 
own. It might, therefore, make just such an arrange- 
ment with the Treasury as it saw fit, if it saw fit to make 
any. But neither the Treasury, nor the bank, nor both 



19 

together, could do away with the written letter of an act 
of Congress ; nor did either undertake so to do. 

But, sir, what have been the gentleman's own opinions 
on this subject heretofore I Has he always been of 
opinion that the Secretary enjoyed this power of selec- 
tion, as he now calls it, under the law of 1816? Has he 
heretofore looked upon the various provisions of that law 
only as so many moveable and shifting parts, to be 
thrown into gear and out of gear by the mere touch of 
the Secretary's hand I Certainly, sir, he has not thought 
so ; certainly he has looked upon that law as fixed, 
definite, and beyond Executive power, as clearly as 
other laws ; as a statute, to be repealed or modified only 
by another statute. No longer ago than the 23d day of 
last April, the honorable member introduced a resolution 
into the Senate, in the following words : 

" Resolved, That, from and after the day of , in the year 

1836, nothing but gold and silver coin ought to be received in payment 
for public lands ; and that the Committee on Public Lands be instructed 
to report a bill accordingly." 

. And now, sir, I ask why the honorable member moved 
here for a bill and a law, if the whole matter was, in his 
opinion, within the power of the Secretary of the Treas- 
ury] 

The Senate did not adopt this resolution. A day or 
two after its introduction, and when some little discussion 
had been had upon it, a motion to lay it on the table pre- 
vailed, hardly opposed, I think, except by the gentleman's 
own vote. A few weeks after this disposition had been 
made of this resolution, the session came to a close, and, 
seven days after the close of the session, the Treasury 
order made its appearance. 

But this is not all. There is higher authority than 
even that of the honorable member. Looking to the ex- 
piration of the charter of the Bank of the United States, 



20 

the President, in his annual message in December last, 
said it was incumbent on Congress to discontinue, by 
law, the receipt of the bills of that bank in payment of 
the public revenue. Now, as the charter was to expire 
on the 3d of March, there was nothing to make its bills 
receivable after that period, except the law 7 of 1816. To 
strike the provision respecting notes of the bank out of 
that law, another law r w r as indeed necessary, according to 
my understanding; but I do not conceive how it should 
be thought necessary, upon the construction of the hon- 
orable member. Both Houses being of opinion, how- 
ever, that the thing could not be done without law, an act 
was passed for that purpose, and was approved by the 
President. Here, then, sir, is the gentleman's own au- 
thority, the authority of the President, and the authority 
of both Houses of Congress, for saying that nothing con- 
tained in the law of 1816 can be thrust out of it by any 
other power than the pow r er of a subsequent statute. 

I am, therefore, of opinion that the Treasury order of 
the 11th of July is against the plain words and meaning of 
the law of 1816; against the whole practice of the Gov- 
ernment under that law; against the honorable gentle- 
man's own opinion, as expressed in his resolution of the 
°2Sd of April; and not reconcileable with the necessity 
which was supposed to exist for the passage of the act of 
last session. 

On this occasion, I have heard of no attempt to justify 
the order on the ground of any other law or act, but the 
act of 1816. When the order was published, however, 
it was accompanied with an exposition, apparently half- 
official, which looked to the land laws as the Secretary's 
source of power, and which took no notice at all of the 
law of 1816. The land law referred to was the act of 
1820; but it turns out, upon examination, that there is 
nothing at all in that law T to support the order, or give it 



21 

any countenance whatever. The only clause in it which 
could be supposed to have the slightest reference to the 
subject is the proviso in the fourth section. That sec- 
tion provides for the sale of such lands as, having been 
once sold on credit, should revert or become forfeited to 
the United States through failure of payment ; and the 
proviso declares that no such lands shall be again sold on 
any other terms than those of " cash payment." These 
words, " cash payment," have been seized upon, as if 
they had wrought an entire change in the important pro- 
visions of the law of 1816, and already established an 
exclusive specie payment for lands. The idea is too fu- 
tile for serious refutation. In the first place, the whole 
section applies only to forfeited lands ; but the truth is, 
the term " cash payment" means only payment down, in 
contradistinction to credit, which had formerly been al- 
lowed ; just as the words in the tariff act of July, 
1832, mean payment down, instead of payment secured 
by bonds, when it says that the duties on certain articles 
shall be paid in " cash." 

As to the second section of the land law of 1820, which 
was set forth with great formality in the exposition to 
which I have referred, as furnishing authority for the Sec- 
retary's order, there is not a word in it having any such 
tendency ; not a syllable which has any application to the 
matter. That section simply declares that, after the first 
day of July in that year, every purchaser of land at public 
sale shall, on the day of purchase, make a complete pay- 
tnent therefor; and the purchaser at private sale shall pro- 
duce a receipt for the amount of the purchase money on 
any tract, before he shall enter the same at the land office. 
This is all. It does not say hoiv the purchaser shall make 
complete payment, nor in what currency the purchase 
money shall be received. It is quite evident, therefore, 
that that section lends the order no support whatever. 



22 

The defence of the order, then, stands thus : The Sec- 
retary founds it upon the idea that nothing but gold and 
silver was ever lawfully receivable, and that the receipt 
of bank bills has been all along an " indulgence" against 
law. For this opinion he gives no reasons. 

The honorable member from Missouri rejects this doc- 
trine ; he admits the receipt of bank notes to have been 
lawful until made unlawful by the order itself; and in- 
sists that the Secretary's power of stopping their further 
receipt arises under the law of 1816, and is an authority 
derived from it. But then, the long and half-official ex- 
position which accompanied the publication of the order 
has no faith in the law of 1816 as a source of power, but 
makes a parade of a totally and perfectly inapplicable sec- 
tion, out of the land law of 1820. Grounds of defence, 
so totally inconsistent, cannot all be sound, but they may 
be all unsound ; and whether they be so or not, is a 
question which I would willingly leave to the decision of 
any man of good sense and honest judgment. I take 
leave of this part of the case for the present. I may 
pause at least, 1 hope, until those who defend the order 
shall be better agreed on what ground to place it. 

Mr. President, the subject of the currency is so im- 
portant, so delicate, and, in my judgment, surrounded, at 
the present moment, with so much both of difficulty and 
of danger, that I am desirous, before making the few ob- 
servations which I intend, on the existing condition of 
things and its causes, to avoid all misapprehension, by a 
general statement of my opinions respecting that subject. 

I am certainly of opinion, then, that gold and silver, at 
rates fixed by Congress, constitute the legal standard of 
value in this country ; and that neither Congress nor any 
State has authority to establish any other standard, or to 
displace this. But I am also of opinion that an exclusive 
circulation of gold and silver is a thing absolutely im- 



23 

practicable ; and, if practicable, not at all to be desired ; 
inasmuch as its effect would be to abolish credit, to re- 
press the enterprise, and diminish the earnings of the in- 
dustrious classes, and to produce, faster and sooner than 
any thing else in this country can produce, a moneyed 
aristocracy. 

I am of opinion that a mixed currency, partly coin and 
partly bank notes, the notes not issued in excess, and al- 
ways convertible into specie at the will of the holder, is, 
in the present state of society, the best practical currency— 
always remembering, however, that bills of exchange 
perform a great part of the duty of currency, and, there- 
fore, that the state of domestic exchanges is always a 
matter of high importance and great actual bearing on 
commercial business. 

I admit that a currency partly composed of bank notes 
has always a liability, and often a tendency, to excess ; 
and that it requires the constant care and oversight of 
Government. 

I am of opinion, even, that the convertibility of bank 
notes into gold and silver, although it be a necessary 
guard, is not an absolute security against occasional ex- 
cess of paper issues. 

I believe, even, that the confining of discounts to such 
notes and bills as represent real transactions of purchase 
and sale, or to real business paper, as it is called, though 
generally a sufficient check, is not always so ; because I 
believe there is sometimes such a thing as over-trading, 
or over-production. 

What, then, it will be asked, is a sufficient check] I 
can only repeat what I have before said, that it is a sub- 
ject which requires the constant care, watchfulness, and 
superintendence of Government. But our misfortune is, 
that we have withdrawn all care and all superintendence 
from the whole subject. We have surrendered the whole 



24 

matter to eight-and-twenty States and Territories. With 
the power of coinage, and the power and duty of regula- 
ting commerce, both external and internal, this Govern- 
ment has little more control over the mass of money 
which circulates in the country, than a foreign Govern- 
ment. Upon the expiration of the charter of the Bank 
of the United States, new banks were created by the 
States. Sixty or eighty millions of banking capital have 
thus been added to the mass since 1832. All this it was 
easy to foresee : it was all foreseen, and all foretold. The 
wonder only is, that the evil has not already become 
greater than it is ; and it would have been greater, and 
we should have had such an excess as would perhaps 
have depreciated the currency, had it not been for the ex- 
traordinary prosperity of the country. No very great ex- 
cess, I believe, has as yet in fact happened, or rather no 
very great excess does now exist. There are sufficient 
evidences, I think, of this. 

In the first place, the amount of specie in the country 
is far greater than was ever known before, and it is not 
exported. In the next place, as all the banks as yet 
maintain their credit, and all pay specie on demand, the 
whole circulation is, in effect, equivalent to a specie cir- 
culation ; and the state of the foreign exchanges shows 
that the value of our money, in the mass, is not deprecia- 
ted, since it may be transferred without any loss into the 
currency of other countries. Our money, therefore, is as 
good as the money of other countries. If it had fallen 
below the value of money abroad, the rates of exchange 
would instantly show that fact. There has been, there- 
fore, as yet, or at least there exists at present, no consid- 
erable depreciation of money. If, then, it be asked, 
what keeps up the value of money, in this vast and sud- 
den expansion and increase of it, I have already given the 
answer which appears to me to be the true one. It is 



25 

kept up by an equally vast and sudden increase in the 
property of the country, and in the value of that property, 
intrinsic as well as marketable. None of us, I think, 
have estimated this increase high enough, and for that 
ftsOD we have all been looking for an earlier fall in 
prices. It seems obvious to me, that an augmentation in 
the value of property, far exceeding all former experience 
in any country, even our own, has taken place in the 
United States within the last few years. The public 
lands may furnish one instance of this rapid increase. 
It was estimated last session, by my honorable friend 
from Ohio, [Mr. Ewiing,] that the demands of actual set- 
tlers for lands for settlement were eight millions of acres 
per annum, on an average of some years. These eight 
millions, if taken up at Government prices at private en- 
try, would cost $10,000,000. Now, partly by cultivation, 
but more by the continued rush of emigration, both from 
Europe and the Atlantic coast, the value of these ten 
millions in a very few years springs up to forty millions ; 
that is to say, lands taken up at one dollar and a quarter 
an acre, soon become worth five dollars an acre for ac- 
tual cultivation, and in intrinsic value. And it is to be 
remembered that these lands are alienable, and saleable, 
with as little of form and ceremony, almost, as if they 
were goods and chattels. Now, if we make an estimate, 
not merely on the eight millions of acres required for ac- 
tual settlement, but on the whole quantity selected and 
taken up annually, w r e shall see something of the addition 
to the whole amount of property which accrues annually 
from the public lands. A rise has taken place, too, 
though less striking, in the value of other lands in the 
country ; and property, in goods, merchandise, products, 
and other forms, is rapidly augmented, also, both in 
quantity and value, by the industry and skill of the people, 
and the extension and most successful use of machinery. 



26 

Another most important element in the general esti- 
mate of the progress of wealth in the country is the 
wonderful annual increase of the cotton crops, and the 
prices which the article bears. Last year's crop reached, 
probably, to eighty millions of dollars. Now, most of 
the cotton produced in the United States is sold, once, at 
least, in the country, and much of it many times. The 
bills drawn against it when shipped, either for Europe or 
the Atlantic ports, are usually cashed at the place of 
drawing, commonly, no doubt, by means of bank notes, 
or bank credits. 

I put all these cases but as instances showing the in- 
creased value of property and amount of business in the 
country, and accounting, therefore, for an expansion of the 
circulation, without supposing great excess ; since it is 
obvious that the circulating money of a country naturally 
bears a proportion to the whole mass of property, and to 
the number and amount of business transactions. 

But there is another cause of a less favorable charac- 
ter, which may have had its effect already ; or, if not, is 
very likely to have it hereafter, in augmenting the circula- 
tion of bank notes : I mean the obstruction and embar- 
rassment of the domestic exchanges. In a proper and 
natural state of affairs, the place of currency, or money, 
is filled to a great extent by bills of exchange ; and this 
continues to be the case, so long as the rates of exchange 
remain low and steady. Nobody, for example, will send 
bank notes or specie from New York to New Orleans, if 
he can buy a good bill at par, or near par. But when 
exchange becomes disturbed, when rates rise and fluctu- 
ate, bills cease to be able to perform this function, and 
then bank notes begin to be sent about from place to 
place, in quantities, to supply the place of bills of ex- 
change, in payment of debts and balances. All such, 
and all other, derangements and distractions in the free 



27 

course of domestic exchanges, necessarily produce an 
unnatural and considerable increase of the circulation. 
So far as our circulation has been, or may be, augmented 
by this cause, so far both the cause and the effect are to 
be deplored. In my opinion, we have certainly reason to 
fear this excess hereafter. What is to prevent it? Is it 
possible that so many State banks, so far apart, so un- 
known to each other, with no common objects, no com- 
mon principles of discount, and no general regulation 
whatever, should act so much in concert, and upon sys- 
tem, as to maintain the currency of the country steady, 
without either unjust expansion or unnecessary contrac- 
tion? I believe it is not possible. I believe many of 
those w T ho insist so much on hard-money circulation be- 
lieve this also ; and that they press their impracticable 
hard-money notions, from a consciousness that the dis- 
continuance of a national institution has brought the 
country into a condition in which it is threatened with 
issues of irredeemable paper. 

Our present evil, however, is of a different kind. It is, 
indeed, somewhat novel and anomalous. With high gen- 
eral prosperity, good crops, generally speaking, an abun- 
dance of the precious metals, and a favorable state of 
foreign exchanges, men of business have yet felt, for 
some months, an unprecedented scarcity of money. 
That is the state of things ; its cause, in my opinion, is 
expressed in a few words: it is the derangement of in- 
terned intercourse, and internal exchange. Our difficulty 
is not exhaustion, but obstruction. Every body has 
means enough, but nobody can use his means. All the 
usual channels of commercial dealing are blocked up. 
The manufacturers of the North cannot obtain from the 
South the proceeds of the sales of their articles; the 
South finds money scarce, too, in the midst of its abun- 
dant exports. 



28 

In a country so extensive and so busy, every mer- 
chant's means become more or less dispersed, and exist 
in various places in the shape of debts. Exchange is the 
instrument, the wand, by which he reaches forth to these 
means, wherever they are, and uses them for his immedi- 
ate and daily purposes. But this instrument is now broken. 
He can no longer touch with it his distant debt, and make 
that debt present money. He seeks, therefore, for expe- 
dients; borrows money, if he can, till times change; pays 
enormous rates of interest to maintain credit ; thinks 
things, when at the worst, must soon change ; looks for 
reaction, and sacrifices to capitalists, to brokers, and 
money-lenders, the hard earnings of years, rather than 
fail to fulfil his commercial engagements. It is a happy 
and blessed hour, this, for greedy capital and grasping 
brokerage ; an excruciating one for honest industry. 
The very rich grow every day richer ; the laborious and 
industrious, every day poorer. Meantime, the highways 
of commercial dealing and exchanges grow more and 
more founderous, or are all breaking up. Specie, 
always most useful as the basis of a circulation, when 
most in repose, gets upon the move. Any time the last 
four months it might have happened, and many times 
doubtless it has happened, that steamboats from New 
York, carrying specie to Boston, have passed in the 
sound steamboats from Boston carrying specie to New r 
York. Boating and carting money, backward and for- 
ward, becomes the order of the day ; and there are those 
who, the more they hear of specie, hauled and transport- 
ed about from place to place, in masses, the more they 
flatter themselves with the idea that the country is 
returning rapidly to a safe and happy specie circulation ! 

There may be other minor causes. They are not 
worth enumerating. The great and immediate origin of 
evil is disturbance in the exchange; and, in my opin- 



29 

ion, this disturbance has been caused by the agency of 
the Government itself. The fifty millions in the Treas- 
ury have been agitated by unnecessary transfers. As a 
large portion of this sum was to be deposited with the 
States at the beninning of next year, the Secretary seems 
to have thought it necessary to cut up, divide, and remove 
assigned portions of it before the time came. It is this 
idea of removal that has wrought the mischief. In con- 
sequence of this, money has been taken from places of 
active commercial business, where it was much needed 
and all used, and carried to places where it was not 
needed, and could not be used. 

The agricultural State of Indiana, for example, is full 
of specie; the highly commercial and manufacturing 
State of Massachusetts is severely drained. In the 
mean time, the money in Indiana cannot be used. It is 
waiting for the new year. The moment the Treasury 
grasp is let loose from it, it will tend again to the great 
marts of business ; that is to say, the restoration of the 
natural state of things will begin to correct the evil of 
arbitrary and artificial financial arrangements, The 
money will go back to the places where it is wanted. 
It will seek its level, and its place of usefulness. In my 
opinion, the proper execution of the deposite law did not 
make it at all necessary for the Treasury to order these 
previous local changes, The law itself is not answerable 
for the inconvenience which has resulted. When the 
time came, the States, all of them, would have been very 
glad to receive the money where it was. They wanted 
but an order for it. They desired no carting, Can any 
thing be more preposterous than to transfer specie from 
New York to Nashville, when to a man in Nashville spe- 
cie in New York is tw r o per cent, more valuable than if 
he had it in his own house? There is always a tendency 
in specie, not actually in the pockets of the people, to- 



30 

wards the great marts and places of exchange. Those 
who want it, want it there. There the great transac- 
tions of commerce are performed, and there the means 
of those transactions naturally exist, simply because there 
they are required. Now, what reason was there for dis- 
turbing the revenue, thus lying where it had been col- 
lected, and thus mingled with the commerce of the coun- 
try I Why laboriously drag it oft', far from its place of 
useful action, to places where it was not wanted, and 
could do no good, and there hold it, under the key of the 
Treasury I 

This anticipation of the operation of the deposite law, 
this attempt at local distribution, this arbitrary system 
of transfer, which seems to forget, at once, the necessi- 
ties of commerce, and the real uses of money, I regard 
as the direct and prime cause of the pressure felt by the 
community. But the Treasury order came powerfully 
in aid of this. This order checked the use of bank 
notes in the West, and made another loud call for spe- 
cie. The specie, therefore, is transferred to the West, 
to pay for lands; being received for lands, it becomes 
public revenue, is brought to the East for expenditure, 
and passes, on its way, other quantities going West, to 
buy lands also, and in the same way to return again to 
the East. Now, sir, how does all this improve the cur- 
rency? What fraud does it prevent, what speculation 
does it arrest, what monopoly does it suppress? I am 
very much mistaken if all this does not embarrass the 
small purchaser of land much more than the large one. 
He who has fifty or a hundred thousand dollars to lay 
out, may collect his specie, not without some charge, it 
is true, but without a very heavy charge. But, if there 
be a man, with a hundred or two dollars, waiting to take 
up a small parcel for actual settlement, and his money 
be in bank notes, and the bank, perhaps, at a great dis- 



31 

tance, what has he to do! He must send far to ex- 
change a little money; or else he must submit to any 
brokerage which he may find established in the neigh- 
borhood of the land office. Upon the local operation of 
this order, however, I say the less, as on that point 
Western gentlemen are better informed and better 
judges. 

I am willing to hope, sir, and, indeed, I do hope and 
believe, that when the first payment or deposite under 
the act of last session shall have been made, and the 
States shall have found some use and employment for 
the money, and when this unnatural transfer system 
shall cease, money will seek its natural channels, and 
commercial business resume, in some measure, its accus- 
tomed habits. But this Treasury order will be a dis- 
turbing agent, every hour it is suffered to exist. Indeed, 
it cannot be allowed to exist long. It is not possible 
that the West can submit to a measure at once so inju- 
rious and so partial. Hard money at the land office, and 
bank notes at the custom-house, must make men open 
their eyes after a while, whatever degree of political con- 
fidence weighs down their lids. I look upon it, therefore, 
as certain, that the order will not be permitted long to 
remain in force. 

If I am now asked, sir, whether, supposing this order 
to be rescinded, and the deposite law executed, and the 
transfers discontinued, affairs will return to their former 
state, I answer, with all candor, that though I look, in 
those events, for a great improvement, I do not expect to 
see the domestic exchanges and the currency return 
entirely to their former state. I do not believe there is 
any agency at work, at present, competent to bring about 
this desirable end. In other words, I do not believe that 
the deposite banks, however well administered, can fully 
supply the place of a national institution ; and I am very 



32 

much mistaken if intelligent men connected with those 
institutions themselves believe any such thing. I find 
that, in 1828, 1829, 1830, 183], and 1832, exchange at 
New York, on the Southern and Southwestern cities, 
averaged three-fourths of one per centum discount, or 
thereabouts. Now, I doubt whether the most sanguine 
of those connected with the deposite banks expect to be 
able, through their means, to bring back exchanges to 
that state, or any thing like it. 

The deposite banks are -separate and distinct institu- 
tions, many of them strangers to each other, without full 
confidence in each other, and all acting without uniformi- 
ty of purpose. Their objects are distinct, their capitals 
distinct, their interests distinct. If one of them has 
connexion with some others, it yet has no unbroken chain 
of connexion. They have nothing which runs through 
the whole circle of the exchanges, as that circle is drawn 
through the great commercial cities of the Union. They 
can only act in the business of exchange to the extent of 
funds, or not much beyond it, actually existing. A na- 
tional institution, with branches or agencies at different 
points, may deal in exchanges between these points in 
amounts to meet the convenience of the public, without 
reference to the fact of the existence of local funds. One 
institution, therefore, with branches, has facilities which 
never can be possessed by different institutions, however 
honorably or ably conducted. 

For myself, I am of the same opinion as formerly, that 
for the administration of the finances of the coffritry, 1for 
the facility of internal exchanges, and for the due control 
and regulation of the actual currency, a national institu- 
tion, under proper guards and limits, is by far the best 
means within our reach. And I am, as I always have 
been, of opinion, that Congress, having the power* of 
regulating commerce, and the power over the coinage, 



33 

has power, also, which it is bound to exercise, by lawful 
means, over that currency in which the revenue is to 
be collected, and which is to carry on that commerce, 
externa] and. internal, which is ttyps committed to its 
regulation and protection. All the duties of this Gov- 
ernment are, in my judgment, not fulfilled, whilg it leaves 
these great interests, thus confided to its own care, to 
the discretion of others, or to the resylts of chance. But 
I will not go farther int® these subjects at the present 
time. * * # ' • 

Mr. President, I am indifferent to the form in which 
the Treasury order may Jbe. done away. Gentlemen may 
please themselves in the mq^e. I shall be satisfied with 
the^ubstance. Believing ittfo be bothkillegai and inju- 
rious, I shall vote to rescind, i& # revoke, to abolish^ to 
supersede, to do any thing whienmay .have rtfe effect of 
terminating its existence. - v - 



On a subsequent day. Mr. Strange having alluded to Mr, Webster's 
speech in 1816, ** * f 

Mr. Webster sai#, I will take this . occasion, as prob- 
ably no more fit one may occur, to say a few words in 
consequence of the reference which has so frequently 
been made, during the course of this debate, to the in- 
troduction by myselLof the jpint resolution of 1816 into 
the other House or Congress, and ,to my observations 
then ma4p on that measure.** I said nothing on that oc- 
casion without deliberation ; nothing w 7 hich I do not now 
embrace as sound policy ; nothing which, as I suppose, 
is in the least degree inconsistent with the principles 
which I at this time maintain ; and I repel, as wholly 
unfounded, any intimation that any thing like incongruity 
or inconsistency is to be found in the sentiments and 
opinions delivered by me on? the two occasions. No 



M 

such inconsistency, indeed, has been, so far as I know, 
directly charged ; but the repeated quotation of my for- 
mer remarks might lead to the inference that such incon- 
sistency was intended to be intimated. The resolution 
of 1816 was accompanied, as originally introduced by me, 
with an introductory resolution, in the form of a pream- 
ble, setting forth the reasons on which the proposed 
measure was founded. The operations of the Treasury 
had at that time become greatly deranged by the war. 
The duties at the custom-houses were received, in many 
places, in the paper of non-specie paying banks ; and, as 
there was a great variety and difference in the value of 
the notes of those banks, there was, of consequence, a 
real difference in the amomit of duties paid in different 
ports. In some cities the discount upon those notes, to 
bring them to the value of legal coin, was five per cent, 
on their nominal value ; in other places ten per cent., 
and in some, indeed, as high as twenty per cent. That 
was the fact in this city. In the years 1814 and 1815, 
bills on Boston could often not be had here under a pre- 
mium of twenty per cent. ; since all the paper of the 
Boston banks was equal to specie, and the paper here de- 
preciated to the extent stated. This was all in the course 
of things, as some banks had suspended specie payments 
and others had not ; and as the duties at the custom- 
house were received in the paper chiefly of the local 
banks, the result was, in effect, a different rate of duties 
in different places, in plain violation of the constitution 
and of all justice. And this difference was great enough 
to turn the whole commerce of the country from the 
Northern to the Southern States. 

It was under these circumstances, and at this time, 
that the resolution of 1816 was introduced by me, with a 
sort of preamble, alleging the impropriety, inequality, 
and illegality of this state of things ; and what was its 



35 

object! Simply to bring back the administration of the 
finances to the rule of law. The law was plain. There 
was no authority, not a particle, for receiving those bank 
notes. There was, in truth, no discretion vested in the 
Secretary of the Treasury as to what should be received 
in payment for duties. All this was settled by plain 
statute provisions. The difficulty arose from no defi- 
ciency of enactments by Congress, The law made it the 
duty of the Secretary to receive, in payments to the 
United States, the gold and silver coins of the United 
States, certain foreign coins, and Treasury notes, and 
notes of the Bank of the United States then lately incor- 
porated ; and nothing else. But we had just emerged 
from the war. The banks had suspended specie pay- 
ments in consequence of that war ; and the Treasury 
was said to have acted under an unavoidable necessity, 
a sort of vis major, which could not be resisted. This 
was the sole ground on which its conduct was justified 
or excused. In the House of Representatives, the intro- 
ductory resolution or preamble was, however, stricken 
out, with my consent, which I readily gave, as it was 
supposed to imply a reproach on the Secretary of the 
Treasury ; and I had not the least intention of casting 
any thing like reproach upon that officer, for a practice 
growing out of the absolute necessity of the case, as he 
and others supposed. All, however, agreed that the 
mode of paying duties, then in practice, was not accord- 
ing to law. The object of the resolution, as I have 
already said, was to bring the practice back to that stand- 
ard ; and on introducing the resolution, I had no other 
or further view. By recurrence to the resolution, as 
originally introduced, it will be seen that it did not con- 
template any enlargement of the means of payment. It 
did not embrace the notes of State banks at all. It con- 
fined all payments to coin, Treasury notes, and notes of 



36 

the Bank of the United States. But this was esteemed 
too strict and severe ; the House of Representatives felt 
a disposition to legalize the receipt of the notes of 
specie-paying State banks ; and to meet this feeling, the 
resolution was amended and enlarged, so as to embrace 
the notes of specie-paying banks. The resolution, as 
thus amended, embraced two objects, both clear and 
distinct; first, to compel the Treasury to confine its 
receipts to such sorts of money as were authorized and 
sanctioned by law ; second, to increase the number of 
those sorts, or to enlarge the legal means of payment, 
by making it lawful to receive the notes of specie-paying 
banks, payable and paid on demand. Both these objects 
were accomplished by the resolution, which, as amend- 
ed, passed both Houses, and became the law of the 
land. 

Now, sir, the question is not whether such a legalizing 
of bank notes was safe or dangerous, wise or unwise. 
Congress saw fit, in fact, to sanction their reception, and 
that is enough. From that moment it became the legal 
right of every debtor, and every purchaser of land, to 
pay in those notes. And, sir, all I said then, I say now, 
viz: that it is a subject to be provided for, and which 
always has been provided for, by law ; that it has been, 
is, and ought to be, above the reach of Executive discre- 
tion ; that, by the law, as it stood before 1816, notes of 
State banks were not receivable ; that, by the law of 
1816, they were made receivable, and put on the same 
ground with coins, notes of the Bank of the United 
States, and Treasury notes. And what is the ground I 
now stand on ? Simply this, that this is a matter of law, 
and not of discretion ; that the Secretary has no more 
right, now, to strike any thing out of the law that is in it, 
than he had, before 1816, to put any thing into the law 
which was not in it. That was my doctrine then ; that 



37 

is my doctrine now. Where is any inconsistency \ At 
that time the Secretary was receiving bank notes con- 
trary to law ; now he is refusing bank notes contrary to 
law. I was for correcting the illegal proceeding then, 
and I am for correcting the illegal proceeding now. I 
take back nothing of what I then said — not a syllable. 
I believe now as I did then ; and, indeed, I believe more 
firmly, as a man is not likely, as he advances in years 
and observation, to grow less anxious on the subject of a 
stable and uniform currency, or less resolute to fix it on 
a permanent basis of law. I felt then the necessity of 
maintaining a legal currency in payment of the dues of 
the Government ; I feel the same necessity now. At 
that time, something was admitted in payment which 
was not in the statute ; at this time, something is refused 
which is in the statute. In both cases the law has been 
departed from ; and in both cases I was, and am, for re- 
establishing its authority. 






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